One of the major energy providers in the UK has expressed concerns about its future prospects after failing to meet a key financial requirement. Ovo, with approximately four million customers, disclosed that it has reached an agreement with the regulatory body Ofgem to address the issue. However, the company acknowledged uncertainties regarding the timeline, potentially raising doubts about its ability to continue operations.

Following the surge in wholesale gas prices triggered by Russia’s invasion of Ukraine in 2021, nearly 30 domestic energy suppliers collapsed, leading to substantial financial burdens for the surviving companies’ customers. In response, Ofgem introduced new financial safeguards effective from April to mitigate significant market disruptions.

Recent reports indicated that Ovo was the sole major supplier hesitant to confirm compliance with the financial resilience standards. Centrica’s CEO, Chris O’Shea, criticized competitors failing to meet these targets, suggesting that they should be restricted from acquiring new customers.

Established in 2009 by Stephen Fitzpatrick, Ovo, which is partly owned by Mayfair Equity Partners and Mitsubishi, experienced a significant financial shift, transitioning from a profit exceeding £1 billion in 2023 to a £167 million loss last year. Despite this, the company emphasized its stable core operations and commitment to customer service and sustainability initiatives.

An Ovo spokesperson reassured stakeholders that the company is well-funded with support from longstanding shareholders and financing partners like Shell. They emphasized that the new capital adequacy requirements are a novel challenge for all suppliers and do not reflect Ovo’s ability to deliver quality service and drive innovation in the energy sector.

A survey conducted by consumer group Which? ranked Ovo alongside So Energy and British Gas at the bottom for customer service satisfaction. The assessment involved nearly 12,000 Which? members and evaluated the internal practices and policies of 16 energy companies.

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